After Inox Leisure's much shared allegation of  'fair weather friends', following Sircar's 'Gulabo Sitabo' film release on Amazon Prime, PVR Limited had a somewhat more restrained discussion with analysts on the implications of some film producers releasing movies on OTT platforms.

The full discussion is here. Key management comments from Kamal Gianchandani, CEO, PVR Pictures:

"It goes without saying, but I would still say that we are definitely disappointed with some of our producers deciding to go straight to the streaming platforms. As Multiplex Association of India, we had requested all the producers to delay their releases and we were hoping that all producers will accede to our requests and would delay there releases till the cinemas reopened. That said, this is not the first time films have gone straight to an alternate distribution platform streaming in this case. Cinemas for long have regularly faced competition from new emerging technologies and distribution platforms."

Kamal Gianchandani is skeptical of the success of the streaming platform when it comes to movie releases. He says:

"Our sense is that these streaming platforms would be paying a premium of about 15% to 20% for the cost of production simply because it is extremely difficult to calculate the expected box office and hence the easier calculation or negotiation would be to attach a premium to the cost of production which we think would be about 15% to 20%."

"How do streaming platforms find this sort of a model sustainable? I think this is a very good question because the fact remains that most of these streaming platforms in India operate on a subscription model. And as you know the subscription fee in India is perhaps the lowest in the world. And hence to expect that is streaming platform would be able to get revenue per eyeball or new acquisitions which will justify these sort acquisition costs is very difficult to imagine. Being in business for a long time, we think most of these acquisitions are tactical in nature."

He also noted that box office sales continues to be the barometer of success. 

"The box office continues to be the most important metric for the producer because it sort of fuels our downstream revenues and which is why actors, directors, producers in most cases are extremely uncomfortable in going straight to a streaming platform because a lot of actors, directors see it as a dilution of their profile.

So we have been competing with alternate platforms for many years. Once we are permitted to open, once things settle down a bit, we believe people will come back in big numbers. There is no change in business model, there is no change in consumption pattern the way we see it."

The PVR Pictures CEO makes some good arguments. But no one knows how medium term preferences will change. It is hard to predict whether users over time will prefer watching big-budget films in their homes, enabling streaming platforms to do 'premieres' and promote films at the level theatres currently do. Netflix has seen some successes in the US with movie releases such as Marriage Story, but these have been largely 'indie films' rather than big picture blockbusters. Gianchandani is right in that at least in the short term, the movie-going experience for Indians will be difficult for a streaming platform to replace. In 5-10 years time? Tech advancements and possibly, a much wider reach for streaming in a high population country like India could change the equation.